Higher interest rates will make monthly mortgage payments significantly more expensive, so buyers should wait until those prices fall. Except that finance and housing experts say it's not that obvious. In fact, despite or even because of rising mortgage rates, now could be a great time to buy a home. The price of the home, the down payment and the interest rate will affect the amount of your monthly mortgage payment.
If you buy a more expensive home, your monthly payment will be higher. And higher interest rates will also increase your monthly payment. With home prices stable or often declining, buyers aren't queuing up to compete for them. Here's why paying higher interest rates, in the short term, might be a good strategy.
And the opposite is also true: when mortgage rates are low, buyers have more money to spend, so home prices will start to rise. After all, higher rates mean higher monthly payments by taking on the same amount of mortgage debt. However, if you look at interest rates from a historical perspective, you can see that rates are still low by comparison. The price of a home is the total amount you pay for the house and the interest rate is the amount you are charged to apply for a mortgage.
Check your eligibility and the latest interest rates to see if fixing a mortgage and buying a home is right for you. If mortgage rates rise high enough, this could discount your qualifying monthly payment and the home you want to buy.